Life and health insurance market in the U.S

Life and health insurance in the U.S reported premiums worth 691.3 billion USD in 2017, a 1.17% increase in comparison with 2016 and 7% in comparison with 2013. The market accounts for 743 players exclusively providing life and health schemes. It is estimated that 60% of American citizens were covered by one life insurance product in 2018.

Despite this high underwriting rate, approximately 20% of life policyholders believe they are covered enough.

Three major product groups dominate the american insurance market:

Capitalization products that provide for annuity payments to beneficiaries,

Health and invalidity guarantees,

Classical life products that is, death and life policies.

With 316.197 billion USD, capitalization product underwritings accounts for 45.7% of the premiums collected from the overall life and health market.

This business has been declining considerably for many years, going from 51.1% in market shares in 2005 down to 49% in 2015 and to 47.7% in 2017.

The accident and health class of business has been sharply increasing during the last recent years and supersedes life insurance. Health insurance gained 6.4 points of market shares between 2005 and 2017.

Life and death traditional insurance products, underwritten individually or through group policies, constituted in 2017 the third life most marketed life business. Like capitalization, the distribution of traditional life products is slightly down in comparison with 2005 when it accounted for 27.5% of the portfolio versus 26.7% in 2017.

A slight growth has been nonetheless noted since 2013.

U.S life and health insurance: Gross premiums per class of business

Figures in millions USD

2013

Δ

2014

Δ

2015

Δ

2016

Δ

2017

Δ

Capitalisation products

318 953

49.30%

325 165

49.10%

333 979

49%

326 359

47.80%

316 198

45.70%

Accident and health

163 049

25.2

168 702

25.50%

171 951

25.30%

179 822

26.30%

190 847

27.6

Life and death insurance

164 629

25.50%

168 416

25.40%

175 143

25.70%

177 168

25.90%

184 326

26.70%

Other products

-

-

-

-

3

-

3

-

4

-

Total

646 631

100%

662 283

100%

681 076

100%

683 352

100%

691 375

100%

Source: National Association of Insurance Commissioners (NAIC)

Life and health insurance market in the U.S: Technical results

Thanks to the growth of more than 9% of the financial products and other revenues, the life insurance in the United States showcased nearly the same net result reported from 2013 to 2017.

Despite growing expenses above those of premiums, the net and technical results remained more or less stable in 2013-2017.

Return on equity had lost approximately two points over the aforementioned period.

Figures in millions USD

2013

2014

2015

2016

2017

Gross premiums

646 631

662 283

681 076

683 352

691 375

Net premiums

562 565

647 275

638 191

599 888

596 923

Net financial products

167 085

171 733

170 761

173 026

182 242

Ceded reinsurance

21 247

14 988

86 444

16 975

25 109

Other revenues

74 260

73 971

125 677

95 967

85 559

Total revenues

782 663

877 991

848 185

851 906

839 615

Total expenses

704 270

812 544

775 518

766 613

759 112

Net result before tax

62 897

49 012

54 396

67 061

63 005

Net result after tax

42 317

37 606

40 285

39 396

42 099

Return on equity (ROE)

12.85%

10.96%

11.17%

10.54%

10.86%

(1) Including other deductionsSources : NAIC data and Federal Insurance Office, U.S. Department of the Treasury, Annual Report on the Insurance Industry (September 2018)"

Life insurance in the U.S: Breakdown of premiums per company

Just like P&C insurance, the life insurance industry in the USA remains concentrated. The ten biggest groups reporting 47% of the 691.374 billion USD of premiums recorded in 2017. For the same year, the 100 leading insurers accounted for almost the entirety of the life premiums, or 91.1%.

Metropolitan Life Insurance Company (MetLife), the number one life insurance company, posted 86.6 billion USD in premiums, that is, a 12.5% share.